💡 This analysis is a research-purpose dataset and is not a recommendation to buy or sell any specific security or ETF. All figures are accompanied by their source and access date.
① Overview
ITA (iShares U.S. Aerospace & Defense ETF) is the leading ETF for the U.S. aerospace & defense sector, managed by BlackRock (iShares). It tracks the Dow Jones U.S. Select Aerospace & Defense Index and concentrates its investments in U.S.-listed aircraft manufacturing and defense equipment companies. A veteran fund listed on May 1, 2006, it holds roughly $14.2 billion in net assets across 44–48 holdings. (Source: iShares official, 2026-04-20)
② TOP10 Holdings
| Rank | Company | Ticker | Weight |
|---|---|---|---|
| 1 | GE Aerospace | GE | 20.37% |
| 2 | RTX | RTX | 14.30% |
| 3 | Boeing | BA | 9.32% |
| 4 | Howmet Aerospace | HWM | 4.68% |
| 5 | Rocket Lab | RKLB | 4.67% |
| 6 | TransDigm | TDG | 4.66% |
| 7 | General Dynamics | GD | 4.49% |
| 8 | L3Harris | LHX | 3.98% |
| 9 | Lockheed Martin | LMT | 3.72% |
| 10 | Northrop Grumman | NOC | 3.44% |
TOP10 total: 73.62% — a highly concentrated structure in which the top 10 of 48 holdings account for three-quarters of the fund. (Source: iShares, Finnhub, 2026-06-02)
③ Cost, Premium/Discount, Taxes
| Item | Figure |
|---|---|
| Expense Ratio | 0.38% |
| Premium/Discount | +0.04% |
| 30-Day Median Bid-Ask Spread | 0.05% |
| Distribution Frequency | Quarterly |
| 12-Month Distribution Yield | 0.49% |
(Source: iShares official, 2026-04-20)
The 0.38% expense ratio is mid-range among peers (XAR 0.35% < ITA 0.38% < PPA 0.58%). The premium/discount of +0.04% is very low, indicating precise NAV tracking. Taxes: As a U.S.-listed ETF, distributions are subject to a 15% withholding tax (assuming a W-8BEN is filed), and capital gains are subject to the 22% foreign-stock capital gains tax (with an annual basic deduction of KRW 2.5 million). Put simply, you should evaluate not just the expense ratio but the total cost including distribution taxes and currency-exchange fees.
④ 5-Year Return
| Period | Annualized Return (NAV) |
|---|---|
| 1-Year | +43.53% |
| 3-Year | +24.82% |
| 5-Year | +16.95% |
| 10-Year | +15.27% |
5-year cumulative +118.81%. By year: 2021 +9.35% · 2022 +9.95% · 2023 +14.27% · 2024 +15.80% · 2025 +48.66%. (Source: iShares NAV total return basis, 2026-03-31)
The key point is that much of the 16.95% 5-year annualized return is concentrated in 2025's single-year +48.66%. Per our own etf_prices data, the 2026 (1/2–6/8) maximum drawdown (MDD) is -15.8%, the latest close is $229.45 (6/8), and the 52-week range is $146.11–$250.37. The 3-year standard deviation of 18.49% exceeds the market average. (Source: our etf_prices, 2026-06-08 / iShares, 2026-03-31)
⑤ Risk
First, top-holding concentration. Despite the appearance of "diversification across 48 holdings," the top 3 alone — GE Aerospace (20.4%), RTX (14.3%), Boeing (9.3%) — make up about 44%. The earnings and news of these three drive the entire ETF.
Second, high valuation and high volatility. P/E 41.13, 3-year beta 1.09 (larger swings than the market). Right after the +48.66% surge in 2025, it fell -10.3% in the single month of March 2026. The more popular the sector, the heavier the valuation burden at the point of entry.
[Counter-consensus] A counterexample to the belief that "defense ETFs are a safe haven against geopolitical risk" — ITA's #1 holding, GE Aerospace (20%), is driven not by pure defense but by commercial aircraft engines and the aftermarket. In other words, rather than a 'safe-haven asset,' ITA is in practice closer to a bet on the commercial aviation cycle plus concentration in the top 3 holdings, and its beta of 1.09 and P/E of 41 are the characteristics of a high-valuation cyclical, not a defensive stock. That said, this counter-consensus has its own trap — the opposite assertion that "therefore it's a bubble" is also overreach. The structural increase in global defense CapEx is real, so the right answer is not the extremes (safe haven vs. bubble) but managing entry price and position size.
⑥ Comparison of Three Similar ETFs
| Ticker | Issuer | Expense Ratio | Holdings | Net Assets | One-Line Difference |
|---|---|---|---|---|---|
| ITA | iShares | 0.38% | ~48 | $14.2B | Cap-weighted; top 3 concentrated at 44% |
| XAR | SPDR (SSGA) | 0.35% | ~40 | $6.3B | Equal-weighted → higher weight to small/mid-cap and growth |
| PPA | Invesco | 0.58% | ~60 | $8.2B | Broadest basket, includes defense technology |
| SHLD | Global X | 0.50% | ~53 | $7.7B | Global (U.S. 59.6%); includes tech such as Palantir |
(Source: iShares, SSGA, Invesco, Global X official and ETF.com, 2026-06-02 to 06-05) Even among the same "defense ETFs," the weighting method (cap vs. equal), region (U.S. vs. global), and expense ratio differ greatly, so judging the sector from a single fund leads to bias.
📜 Disclaimer: This data is a research-purpose dataset and is not investment advice. It is not a recommendation to buy or sell any specific security or ETF, and all investment decisions and their outcomes are the sole responsibility of the investor. MC AI Labs is not a quasi-investment-advisory provider under the Capital Markets Act.